Today, we take a field trip to a historic section of the Duke of Dollars Kingdom: off in the far reaches, near the hallowed spot where Jack and Chris first met, lies the most glorious monument to Vickie Robin’s and Joe Domiguez’s Your Money or Your Life.

This excursion to the Land of the Book Review is brought to you by Rockstar Finance, aggregator extraordinaire of the personal finance community since 2013. To peruse reviews of other chapters, written by bloggers whose muse we share, click here.

Chapter 5 of Your Money or Your Life might well have been called, “Why There Are So Many Financial Blogs” though its official title is “Getting It Out in the Open.” It’s about accountability and pushing beyond the social conventions that smother our conversations regarding the topic of money.

You will feel the power of The Wall Chart

Front and center is THE WALL CHART. In this chapter, we worship The Wall Chart, for it shows us the way. The way that was, the way that is, and the way that might be.

You could boil The Wall Chart down to its essence and use Ben Stein’s voice to call it, “a monthly line graph of your income and expenses.” But that wouldn’t make enough content for a whole chapter, let alone a blog post to review it. In the book, the authors use case studies to fill in the rest of the chapter. Me, I’m going to tell a story.

(And truthfully, there’s a lot to be said about the chart itself. More on that later. Now – story time.)

How my finances changed after reading Your Money or Your Life

I’ve had a complicated relationship with The Wall Chart. I converted to Wallchartism in April 2010. By pure coincidence, I happened to have read Your Money or Your Life that same month and year.

Just a few months prior, I had dug myself a good-sized hole by purchasing my first house. And by purchasing, I mean asking a bank to hold on to a certain property on layaway for 30 years while I figure out how to pay them back a few nickels at a time.

Fortunately for me, the thought “Oh crap – I need a new place to live” happened right at the same time that interest rates were low, houses were cheap, my earnings were rising, and the government was handing out cold hard cash for first time buyers. I bought an $8,000 car immediately after depositing that $8,000 check from Uncle Sam. In fact, you can see it right here:

A five year Wall Chart, real life example

That’s right! I still have my Wall Chart. I was so happy when I was assigned this chapter to review. It’s like asking your coworker to talk about his kids, and he pulls out that wallet insert thingy – wait no, it’s 2018 edition Your Money or Your Life not 1999 – his cell phone.

In addition to the mortgage, I had student loans for both me and my wife. This pile of debt had motivated me to push an already-budding interest in Personal Finance on to its next level.

Wanna see some student loans DESTROYED?? Check out this net worth chart:

See my net worth, total invested balance, and total debt over time — and watch my student loans get destroyed!

I wanted not just to save as much money as I could but also to implement a system that could automate and encourage me to do better with spending. Reading Your Money or Your Life, specifically Chapter 5, is what gave me the boost I needed on my financial independence journey.

The Category-Specific Expenses Wall Chart

If you keep good enough data, you can break down your wall chart by categories. Mine even had subcategories. Here’s an example, always a contentious and manageable expense: Food!

Always an appropriate expense to track and manage: food

Tracking these expenses and compiling monthly reports helped me identify the key areas where I could manage money flow and still live an optimal life. I was meticulous and consistent with my tracking. For a while, anyway.

Taking a sabbatical from expense tracking

Eventually, I stopped tracking income and expenses down to the penny. I’m not sure exactly why, to be honest.

For a long time, I blamed the “estimated” chart section on my life circumstances. But when I look back on my Wall Chart, I see that I stopped tracking before those life circumstances turned me upside down. Such is the beauty of having a treasure trove of data: one can’t argue with or explain away true facts.

In addition to consistently tracking my debt, investment total, and net worth, I did continue to plug in my salary, which eventually became my business income.

You can identify the moment that I ventured away from “Employed” to “Self Employed” by the enormous green spikes on the far-right of the chart. If you can earn 1099 income instead of W2, you should probably consider it.

For expenses, I found a solid a baseline month and increased it by a modest inflation.

Aaaand I got lazy tracking income and expenses

Much of Chapter 5 focuses on handling the emotions and self-doubt that are a result of tracking expenses meticulously. Reading through the latest edition, I found that Your Money or Your Life offered some insight into my tracking behavior (or lack thereof).

Why I stopped tracking expenses

Arguing with a spouse about money

I’ll admit there were times that I started fights with my wife about a month of spending. And it seems so silly to look back on: “Hey, you see this red dot above this green dot? Well that right there represents two numbers calculated over an arbitrary length of time, and THEY’RE IN THE WRONG POSITIONS!”

You can see that, even from the beginning, we were doing fine. Income exceeded expenses most of the time, and the gap was growing ever-larger. There was no reason to fight. If plotting the numbers had some chance of leading to an argument, that could be a factor in avoiding the monthly ritual.

Arguments between my wife and I are always civil and usually no big deal. So spousal conflict can’t be the only reason I stopped tracking.

Allowing lifestyle inflation to creep in

It’s easier to permit lifestyle inflation when there’s no report card. As my income grew, I had increasingly large gaps between my expenses and the income available to cover them.

I think that after years of frugality, a part of me wanted to let go a little bit. There were people to see and places to go, and so I saw and I went. My expenses crept up, and I felt less like plotting them on the chart when I knew I’d cringe at the result.

Turning my attention away from finances, toward more important matters

I went through a particularly difficult period in life, and I really let loose of the reins for a few years.

I certainly didn’t want to track what my household spent during those years. We focused on personal and health issues, not finances. I once told a friend, “I’ve got three buckets: time, money, and health. I’m pulling out of the money bucket to help out with the other two.”

Credit card shenanigans complicated the process

Whereas I had automated data import from just a few sources in the beginning, later in the chart, I churned credit cards to boost income. That endeavor complicated the tracking process tenfold. If I had kept it simple and automated, I might’ve kept track better.

I’m a bad budgeter because of pure, unadulterated laziness

If I’m completely honest, I stopped tracking mostly because I didn’t feel like doing it. If I’m going to conquer tracking again, I’ll need to double down on automation so that success is not dependent on me putting forth effort! Know thyself.

Lessons Gleaned from The Wall Chart

It’s foolhardy to retire without data

I have a Retirement Budget, but it’s based on years-old data. I’m planning to retire within 4 years, and I’ll need fresh, accurate data to determine whether or not I’ve hit my number. Between the approaching Big Day, reading Your Money or Your Life again, and taking an honest assessment of my past expense management, I know that now’s the time to hit the reset button.

I’m going to start tracking my numbers again, in detail.

Consistency is best, but something’s better than nothing

I’m glad that I continued to track the most important numbers and estimate the rest. It gives me a baseline to jump right back into the fray.

It’s clear from my first few years of tracking, though, the times when I was most consistent – that’s when my expenses were the lowest. I know that as I ramp up my efforts, finding my tracking groove (month in and month out) is the best way for me to reach my retirement goal with confidence.

When it comes to expense tracking, categories matter

One key to managing expenses over time is to categorize correctly. Spend extra time at the beginning to build your categories correctly so that you can compare data from month to month and year to year.

After more than 8 years, I plan to use the exact same categories that I used in 2010. I put a lot of thought into how to categorize back then, and I trust the resulting structure. Plus, I’ll have an easy way to analyze Then vs Now and drill down into why certain expenses have grown so much.

Remember the three questions

I believe I’d have been far more successful with tracking my expenditures if only I had stuck to asking myself Joe and Vickie’s three questions, worth repeating here:

“Did I receive fulfillment, satisfaction, and value in proportion to life energy spent?”

I’ll make sure to have these questions in a highly visible location during my monthly reviews.

Don’t lose sight of the big picture; you’re not working for the chart

What starts as a tool for frugality and self-care may sometimes present itself as an idol. The Wall Chart is not the be-all, end-all REASON why you’re working.

You’re working to build an enjoyable, fulfilled life. If sending your kids to camp is an experience you want to buy for them, but it would move Expenses above Income for July, so be it.

Work on expenses, don’t just expect them to drop naturally

At some points in this chapter, the authors seem to imply is that The Wall Chart has some magical powers. When reading, I couldn’t help but disagree with the part that says,

“Without even trying you’ll find your expense line heading down.”

I think that in order to reduce expenses, you need to try. There’s effort involved with chasing down $10 here and annihilating $50 there in your monthly budget.

While you’re putting in effort to bring the expenses line down, down, down – remember that in addition to toiling away at the task, you need to employ patience. Achieving your optimal monthly spend requires time, practice, and – often times – giving yourself grace.

Side income helps tremendously

Making $100 here and there can help so much when Income and Expenses are close together. A few extra bills made over the course of the month can make all the difference. When you’re on a regular salary, this variable income is highly visible over the course of several months.

Instead of a steady line punctuated by 3-paycheck-months, you should see a few jumps and spurts as your side hustles pay off. Don’t box yourself into a “fixed income” with the abundance of extra money earning opportunities available today.

Create a system that incentivizes everyone to save

For the longest time, my household financial system ran off the principal that both spouses had credit cards, and just one would reconcile cash flow and spending each month.

When I type that out in black and white, I can finally see how absurd that setup was!! It’s a recipe for arguments.

We’ve now moved to a more logical system, which I’ll detail in a future post.

Your Money or Your Life – Chapter 5 Summary and Conclusion

Chapter 5 brings together all the work of the previous chapters and makes the result visible, via The Wall Chart. The authors show that The Wall Chart is essentially a tracker for life energy. They encourage the reader to keep this chart in a highly visible location, hold oneself accountable, and answer the three key questions.

I’m sure that if you surveyed the Personal Finance bloggers of the world, “Accountability” would rank high on their lists of motivations for blogging. What better way to motivate oneself to improve than announcing to the world, “Hey – I spent $600 on food this month. I need to do better.”

After all these words and analyses about a topic as banal as tracking spending, I need only the authors’ words to take away: “1. Start. 2. Keep going.”

About The Author

I'm at the tail end of a white-collar career, an age when many of my peers are moving into middle management or senior leadership roles.
Combining a keen sense of frugality with a high income, I was able to sock away a substantial amount of money early in my life. Helped along by a perfectly timed recession and subsequent bull market, my passion for investing turbocharged my retirement efforts, and I’m on the verge of submitting my notice. But first – I have some loose ends to tie up and a few extraneous goals to meet while my marketable skills are at their peak.

Totally agree with Tracking being more effective than Budgeting. I combine Tracking (The Wall Chart) with Forecasting (Cash Flow). That way, I know where the cash is going and where it’s been.

For budgeting purposes, in a nutshell, we’ve separated the “variable” spending out to its own checking account. That account gets a set amount of money each month to cover “essentials” + “comforts.” If we can live on the set amount, then we can retire on a certain date according to my Wall Chart forecast.

Haha, I love that you have fun with your wall chart. At the end of the day, it’s all about self-reflection and keeping ourselves accountable to ourselves. I’m a big believer in intentional spending to maximize personal utility. I still budget manually every year, but I track automatically now via personal capital.